How we can make globalisation fairer

We need international action to halt the slide on corporation tax.

The world's wealthy and powerful have convened in the small Swiss town of Davos this week with income disparity high on the agenda. But although it tops the list of CEO risks, no one here appears clear about how to deal with the problem.

The global financial crash should have been the left's moment but now in the fifth year of the crisis, which unpicked many of the principal assumptions of neoliberalism and the Washington Consensus, social democrats and progressives are no closer to having an analysis about how to make the global economy work more equitably and sustainably.

The occupy movement have done much to raise awareness of the issue - spooking company bosses along the way - but they have been largely silent on alternatives, passing the buck to politicians. In the UK our elected representatives have fallen over one another to call for a more popular, responsible or mutualist form of capitalism but suggest micro measures at the domestic level. They miss the point that global fairness in a global economy starts at the global level.

A new report by IPPR, launched today in Davos, takes an analytical and historical look at globalisation to break it down into component parts and understand what has delivered progressive outcomes and what has failed. On the BBC's Today programme this morning, Lord Mandelson - who led our Globalisation project and wrote a foreword to the report - spoke of how markets, while indispensable, can become volatile and need to be regulated, and that globalisation creates income inequalities. Unlike the laissez faire approach to globalisation of the 1990s which appeared to see globalisation as an end in itself, we see that globalisation has the potential to lift people out of poverty and expand the global middle class, as it has most dramatically in China, but that it comes with risks too.

Chief among the risks are the prospect of a downward spiral on corporation tax and the excessive volatility inherent in some forms of capital mobility. The first has moved the tax burden away from global corporations towards individual income, consumption and domestic firms; the latter is part of a wider problem in the financial services sector where pay and performance have become unhinged with all the incentives geared at the short term gains rather than long term value.

Our report recommends concerted international action to halt the slide on corporation tax by making profits across Europe contingent on where sales, staff and production is actually based rather than where the head office is registered. We also push for a more widespread understanding that capital controls, which the IMF now advocate but other organizations like the WTO still oppose, are a legitimate policy in certain circumstances.

In surplus countries like China, health, unemployment and retirement insurance systems are key to reducing savings rates and increasing domestic demand. Conditional cash transfers, like, for example, former President Lula's 'bolsa familia' policy of giving poor families incentives to vaccinate their kids and send them to school, are also a good way of lifting living standards.

In current account deficit countries like the UK and US, the challenge is to increase levels of trade. The projected increases in the global middle class create huge export opportunities for Britain in educational services, higher education, medical devices,green technology, the creative industries and tourism as well as our more traditional comparative advantages such as financial services, aerospace and pharmaceuticals.

In addition we must ensure that consumption is based not on debt but on rising wages. Efforts to broaden the living wage is key to this but so too should countries like Britain reorient their welfare policies towards the crisis points that globalisation can cause like unemployment. Wage loss insurance, which would mean higher benefits when people lose their job but a requirement to pay it back when they return to employment, is another idea worth exploring. Ensuring that Britain

Meeting the concerns of citizens everywhere who feel anger at the growing disparities in society at a time of austerity is by no means easy. But it is essential if governments and CEOs are to avoid an even bigger populist backlash.

Will Straw is Associate Director at IPPR

Will Straw was Director of Britain Stronger In Europe, the cross-party campaign to keep Britain in the European Union. 

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I am special and I am worthless: inside the mind of a narcissist

There's been a lot of discussion about narcissists this week. But what does the term actually mean?

Since the rise of Donald Trump, the term “narcissistic” has been cropping up with great regularity in certain sections of the media, including the pages of this journal. I wouldn’t want to comment about an individual I’ve never met, but I thought it would be interesting to look at the troubling psychological health problem of narcissistic personality disorder (NPD).

People with NPD (which is estimated to affect about 1 per cent of the population) have a characteristic set of personality traits. First, they have a deeply held sense of specialness and entitlement. Male NPD sufferers frequently present as highly egotistical, with an unshakeable sense of their superiority and importance; female sufferers commonly present as eternal victims on whom the world repeatedly inflicts terrible injustices. In both cases, the affected person believes he or she is deserving of privileged treatment, and expects it as a right from those around them.

Second, NPD sufferers have little or no capacity for empathy, and usually relate to other people as objects (as opposed to thinking, feeling beings) whose sole function is to meet the narcissist’s need for special treatment and admiration – known as “supply”. In order to recruit supply, NPD sufferers become highly skilled at manipulating people’s perceptions of them, acting out what is called a “false self” – the glittering high achiever, the indefatigable do-gooder, the pitiable victim.

The third characteristic is termed “splitting”, where the world is experienced in terms of two rigid categories – either Good or Bad – with no areas of grey. As long as others are meeting the narcissist’s need for supply, they are Good, and they find themselves idealised and showered with reciprocal positive affirmation – a process called “love-bombing”. However, if someone criticises or questions the narcissist’s false self, that person becomes Bad, and is subjected to implacable hostility.

It is not known for certain what triggers the disorder. There is likely to be a genetic component, but in many cases early life experiences are the primary cause. Narcissism is a natural phase of child development (as the parents of many teenagers will testify) and its persistence as adult NPD frequently reflects chronic trauma during childhood. Paradoxically for a condition that often manifests as apparent egotism, all NPD sufferers have virtually non-existent self-esteem. This may arise from ongoing emotional neglect on the part of parents or caregivers, or from sustained psychological or sexual abuse.

The common factor is a failure in the development of a healthy sense of self-worth. It is likely that narcissism becomes entrenched as a defence against the deep-seated shame associated with these experiences of being unworthy and valueless.

When surrounded by supply, the NPD sufferer can anaesthetise this horrible sense of shame with the waves of positive regard washing over them. Equally, when another person destabilises that supply (by criticising or questioning the narcissist’s false self) this is highly threatening, and the NPD sufferer will go to practically any lengths to prevent a destabiliser adversely influencing other people’s perceptions of the narcissist.

One of the many tragic aspects of NPD is the invariable lack of insight. A narcissist’s experience of the world is essentially: “I am special; some people love me for this, and are Good; some people hate me for it, and are Bad.” If people with NPD do present to health services, it is usually because of the negative impacts Bad people are having on their life, rather than because they are able to recognise that they have a psychological health problem.

Far more commonly, health professionals end up helping those who have had the misfortune to enter into a supply relationship with an NPD sufferer. Narcissism is one of the most frequent factors in intimate partner and child abuse, as well as workplace bullying. The narcissist depends on the positive affirmation of others to neutralise their own sense of unworthiness. They use others to shore themselves up, and lash out at those who threaten this precarious balance. And they leave a trail of damaged people in their wake. 

This article first appeared in the 16 February 2017 issue of the New Statesman, The New Times